Derrick Iverson is a divisional manager for Holston Company. His annual pay raises are largely determined by his division's return on Investment (ROI), which has been above 25% each of the last three years. Derrick is considering a capital budgeting project that would require a $5,170,000 Investment in equipment with a useful life of five years and no salvage value. Holston Company's discount rate is 19%. The project would provide net operating Income each year for five years as follows: Contribution margin Sales Variable expenses. Fixed expensess out-of-pocket costs Depreciation $4,500,000 2,000,000 2,500,000 Advertising, salaries, and other fixed $ 780,000 1,034,000 Total fixed expenses 1,814,000 $ 686,000 Net operating income Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the project's net present value. 2. Compute the project's simple rate of return. 3a. Would the company want Derrick to pursue this investment opportunity? 3b. Would Derrick be inclined to pursue this investment opportunity? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 38 Compute the project's net present value. (Round your final answer to the nearest whole dollar amount.) Net present value Prev 3 of 7 Next > Complete this question by entering your answers in the tabe below Req 1 Req 2 Req 3A Req 38 Compute the project's simple rate of return. (Round your answer to 1 decimal pes 123d 12.3%.) Simple rate of retur < Prev 37 Next >> 3a. Would the company want 3b. Would Derrick be inclined to pursue this investment opportunity? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 38 Would the company want Derrick to pursue this investment opportunity? Yes No Complete this question by entering your answers in the tabs below Req 1 Req 2 Req 3A Req 38 Would Derrick be inclined to pursue this investment opportunity? Yes ONO